Tap OFWs to ease COVID lockdown hunger

OFW Forum

Jun Concepcion

As a tight lockdown or ECQ looms in Metro Manila from August 6, how will the national government feed its 14 million plus residents?

Presented by the media with this blunt question last week, Budget Secretary Wendel Avisado and presidential spokesman Harry Roque were both unable to provide clear and definitive answers.

Like national officials, local government executives are also at a loss how to feed their constituents, who are likely to get hungry as the latest lockdown will force them to stay home and be deprived of income. Navotas city Mayor Tobias Tiangco told the media late last week that his LGU no longer has money to provide emergency food aid for its  constituents and that his city will depend on the national government for funds. Like Navotas, other local governments will look to the national government for help, he added.

But where and how will the national government find substantial sums – particularly steady and continuing funds – to feed millions of people who are likely to face prolonged hunger and hardships as the end of the global COVID crisis remains elusive and uncertain?

A simple and clear answer lies in the huge elephant in the room – 10 million-plus overseas Filipinos. In  one month alone in May this year, overseas Filipinos or OFWs sent home via banks and informal channels over US$5 billion or P250 billion, as per Bangko Sentral ng Pilipinas data.

If this is the huge scale of OFW contributions, why isn’t the government tapping them for much-needed funds amid the continuing COVID crisis? This failure clearly defies reason and logic since such initiative can be very simply done by offering to OFWs a high-interest bearing retail bond. This high-yield investment instrument will even bring he following immense benefits to everyone:

1] If the government offers, for instance, a retail bond that pays an interest or coupon of five percent every six or 12 months, tens and even hundreds of thousands of OFWs are likely to snap it up -- if affordable and accessible – and if minimum lot or investment is just P20,000 to P50,000.

2] This retail bond can provide the government with a huge funding source while meeting many OFWs’ search for a safe, attractive and reliable investment instrument.

3] This funding source can be long term and very stable, thereby enabling the government to fund lots of development programs and projects

4] This government offer will help persuade OFWs to invest and save, and in the process,  bolster national savings generation which is among the lowest in Asia

5] A high interest income on offer will help educate OFWs and Pinoys in general on the merits of saving and investing

6] An initial high-yield retail bond can be followed by other investment products, like mutual funds and investment-linked insurance products, thereby broadening and deepening people’s financial literacy of people

7] A government-initiated investment offer will go a long way to scale down investment scams, especially pyramid schemes

Let’s work the numbers a bit to demonstrate the immensity of OFWs’ assistance to bail out the country from COVID and other crises that will require substantial sums. Assuming just 100,000 OFWs each invests P50,000 in a government retail bond that pays a coupon or interest of, say, five percent  every six or 12 months – which is very attractive compared to the ultra tiny net bank savings interest income, a kitty of P5 billion can easily be raised.

If say, 500,000 OFWs are persuaded to invest P50,000 each in this government retail bond which pays much higher than what is paid in a bank savings or time deposit account, then P25 billion can be raised. With over 10 million Filipinos spread across nearly all corners of the world and with the number intriguingly increasing further despite COVID due to unabated poverty, the opportunity to further generate investible funds from OFWs is clearly very promising and even lucrative.

And what will it take to raise much needed funds from OFWs? Not much really.

There is absolutely no reason why OFWs – whether in the Middle East or in Italy, Singapore or Hong Kong – can’t invest in this high-interest-bearing  government retail bond offer using their mobile phones or tablets with Internet service. The Philippines exports thousands, of computer professionals every year to Singapore, Hong Kong, the US and other countries, and it is unthinkable and a great shame if the Department of Finance and private universal banks can’t employ bright IT staff to come up with easy-to-understand-and-use, safe and reliable online investment platforms. If not an online investment scheme, an alternative system or mechanism can be devised by the DOF or private banks that will enable OFWs to make their investments using traditional investment documents to be filled up at the offices of remittance firms overseas.

By simply employing the Internet, the government can easily gain access and tap the funding assistance of over 10 million overseas who send home an average of $30 billion a year.

By simply getting more creative and pro-active, there is no excuse or reason for government to say funds are not available for use in tackling the COVID or any other crisis.

Contact writer at jchk94@yahoo.com